Labor-Market Quality
of Foreign-Born Workers
2007-2017

Rubén Hernández Murillo

FDIC — May 13, 2022

(Federal Reserve Bank of Cleveland Economic Commentary, May 2020.)

Goals

  • The foreign-born are (very) important for the US economy
  • Data from the ACS on labor-market quality between 2007 and 2017
  • Various measures of labor-market quality improved over the period
    • Notable increases among Mexican-born workers
  • Why?
    • Shift in the composition of the foreign-born
      • Increase in immigration from Asia
      • Precipitous decline in immigration from Mexico (why?)

The foreign-born are very important

  • Most of the foreign-born population are working-age individuals
    • The foreign-born represent almost 20% of the US workforce
  • The foreign-born population grew 2.5x to 3.3x faster than the US-born
    • Overall US population grew 8.2%:
      • 2.2% was growth in the overall foreign-born population
      • 6.1% was growth in the overall US-born population
    • Working-age US population grew 5.7%:
      • 2.2% was growth in foreign-born workers
      • 3.5% was growth in US-born workers

Measures of labor-market quality

  • Educational attainment
  • English proficiency
  • Earnings potential

Educational attainment by area of origin

English proficiency by area of origin

Median annual earnings relative to
US-born workers by area of origin

Distribution of the recent foreign-born
by area of origin

Border enforcement

Conclusion

  • Measures of labor-market quality of foreign-born workers
    improved during 2007-2017
  • Notable gains seem concentrated among immigrants from Mexico
  • The apparent increase in quality results from
    a shift in the distribution of immigrants:
    • Increased immigration from Asia
    • A precipitous decline in immigration from Mexico
  • Factors behind the decline in immigration from Mexico:
    • Increase in border enforcement over past two decades
    • (Decrease in US demand for Mexican workers after 2008/9 recession)